A recruitment agency with a solid contract book, a senior team that doesn’t need the owner to close deals, and revenue spread across a dozen clients will sell for 5x to 7x EBITDA in Australia — sometimes more for niche specialists. A perm-only desk where the founder is the top biller, with three clients representing 70% of fees, will be lucky to get 2.5x. The business model is the same; the valuations are miles apart.
Here’s what drives those numbers, and where yours is likely to sit.
What Australian Recruitment Agencies Actually Sell For
The short answer: anywhere from 2x to 8x EBITDA, and that range is not an accident. Recruitment businesses are people businesses, which means buyers are trying to price the probability that revenue walks out the door when you do.
Rule of thumb: perm-focused agencies sell for 3x-5x EBITDA; contract-heavy agencies with recurring revenue sell for 4x-7x; niche specialists with MSA agreements or preferred supplier panels can reach 7x-9x.
| Business Profile | Indicative Multiple | Notes |
|---|---|---|
| Perm-only, owner is top biller | 2x-3x EBITDA | High key-person risk |
| Mixed perm/contract, owner-led | 3x-4x EBITDA | Standard SME range |
| Contract-focused, senior team | 4x-6x EBITDA | Recurring revenue premium |
| Niche specialist, panel contracts | 5x-8x EBITDA | Premium for defensibility |
| Enterprise labour hire, multi-client | 5x-7x EBITDA | Scale + recurring = value |
These are goodwill multiples. If you own your office fitout or have debtors on the balance sheet, those get valued separately. The multiple applies to your adjusted EBITDA — which means after adding back your personal car, superannuation above the minimum, and any other owner perks that a buyer wouldn’t incur. (More on that in our guide to EBITDA add-backs when selling a business.)
Why Permanent vs. Contract Changes Everything
This is the single biggest valuation driver that owners underestimate.
A permanent placement pays once. The candidate starts, you invoice 15% of salary, and the relationship resets. If the same client comes back next month, that’s a new sale. From a buyer’s perspective, permanent placement revenue is lumpy, unpredictable, and tied directly to the consultant who built the relationship.
A contract desk is different. When you place a contractor, they bill every week — sometimes for 12, 24, or 36 months. That weekly margin doesn’t require a new sale. It just requires the contractor to still be there and the client to still be happy. Buyers love this. It looks and feels like recurring revenue, and it gets priced accordingly.
A broker I spoke to last year described a deal where the seller had built a 15-person agency — eight perm consultants and two contract managers. The perm desk was doing $600,000 in fees; the contract book was generating $400,000 in annual margin. The buyer’s offer was almost entirely driven by the contract book. The perm desk came along as upside. The seller was initially frustrated — he’d spent a decade building the perm business — but the math was hard to argue with.
If your revenue is more than 60% permanent placements, start thinking about how to shift that mix before you go to market.
Key Person Risk: The Biggest Discount Trigger
Most recruitment businesses have a version of this problem. The founder is excellent. The founder knows every client. The clients like doing business with the founder. The founder also does the invoicing, approves the job ads, and handles every difficult conversation.
Buyers price this. Hard.
If you’re billing more than 30% of the agency’s total fees personally, expect buyers to ask about what happens if you leave. The answer — “I’ll do a 12-month handover” — helps, but not as much as you think. Buyers know that 12 months is not enough time to transfer a relationship that took 10 years to build.
The way to address this before selling: promote your two best consultants to senior roles, let them lead client meetings, have them present the candidate shortlists, and make sure clients know them by name. Give it 18-24 months. You’ll see the multiple respond.
This also connects to what buyers look for more broadly — transferable systems, relationships that sit in the business rather than the person, and a pipeline that doesn’t depend on the founder’s diary. What buyers look for when buying a business covers this in more detail.
Client Concentration: When Three Clients Is Two Too Many
The 20% rule applies here just as it does in most service businesses. If any single client accounts for more than 20% of your revenue, buyers start discounting. If your top three clients are 70% of revenue, you’re not selling a business — you’re selling a dependency.
This matters more in recruitment than almost any other sector because client relationships in recruitment are personal. The client doesn’t just use your agency; they use your consultant. And your consultant is a free agent who can resign, take the client to a competitor, and start the whole thing over. Buyers know this.
Diversification isn’t just about risk. It’s about demonstrating that your business model works at scale, across multiple relationships, in a way that a new owner could sustain.
Niche Beats Generalist, Every Time
A generalist recruitment agency competing for every role across every sector is fighting on price. The margins get compressed, consultants are stretched thin across unfamiliar verticals, and the pitch to clients becomes “we’re faster and cheaper” — which is not a great basis for valuation.
Specialist agencies — mining and resources, medical, accounting and finance, engineering, executive search — can charge higher fees, attract better consultants, and build deeper client panels. When a mining company signs you as a preferred supplier for all technical roles in WA, that’s a defensible position. That defensibility is what commands a 6x or 7x multiple rather than 3x.
If you’re generalist right now, think about which verticals you’re consistently winning in. That’s usually where the specialisation story lives.
What Buyers Actually Look at in Due Diligence
When a strategic buyer or private equity firm looks at a recruitment agency, they go through three lenses:
Revenue quality. How much is recurring contract margin versus one-off perm fees? What does the trailing 36 months of billing look like — steady, growing, or lumpy? Is revenue tied to specific consultants or spread across the team?
Team stability. What’s the consultant retention rate over the past two years? Are your senior billers on employment contracts? Are there restraint clauses that would apply on exit? (This cuts both ways — buyers want protection from poaching, and they want to know you haven’t already created the conditions for a mass departure.)
Client relationships. Do you have MSA agreements, preferred supplier status, or enterprise vendor agreements? Are those agreements transferable? Do clients know and deal with multiple people in your business, or just you?
None of these kill a deal on their own. But they all affect the multiple — and the structure. A buyer who’s nervous about key person risk might offer a lower upfront payment with an earn-out tied to revenue retention over 24 months. That’s not necessarily a bad deal, but it’s a different conversation to a clean 5x cash settlement at completion. Our article on earn-out agreements explains how those structures work in practice.
Tax on the Sale: Worth Planning Early
The other number that affects what you actually walk away with is capital gains tax. If you’ve owned the business for more than 12 months and your turnover is under $2 million, you may qualify for small business CGT concessions — potentially reducing your tax to zero on the capital gain. At higher revenue levels, the retirement exemption and 50% active asset reduction still apply.
This is not something to think about the week before settlement. Good planning here — ideally 12-24 months out — can materially change the amount you keep. Our guide to tax on selling a business in Australia covers the main concessions and how they apply.
Before You Go to Market
The businesses that achieve top-of-range multiples have usually spent 12-24 months preparing. The checklist is shorter than you’d think: build contract revenue, reduce key person dependency, document your processes, diversify your client base, and get your financial statements clean and accountant-reviewed for the past three years.
How to increase your business value before selling has a 12-point checklist that applies directly to recruitment agencies.
When you’re ready to run a proper process — not just list on a broker site and wait — that’s when a corporate advisor earns their fee. A good advisor will run a structured process, approach strategic buyers who wouldn’t find you through a listing, and negotiate the deal structure rather than just the headline number. When to hire a corporate advisor to sell your business explains the difference in outcomes.
If you want to understand what your recruitment agency is worth right now — before you decide anything — start with the Miro Capital valuation calculator. Or if you’re further along and want to talk through a sale process, get in touch. We work with recruitment and professional services businesses across Australia, with a particular focus on WA.
Miro Capital is a boutique corporate advisory firm based in Perth. We help Australian business owners sell their businesses.